The Roots of the Recession

Bryce J. Christensen and Robert W. Patterson

When the U.S. Commission on Population Growth and the American Future—a project of President Richard Nixon and John D. Rockefeller III to tap the bright minds of their generation on a pressing issue—released its report in 1975, its cover letter stated “we have concluded that, in the long run, no substantial benefits will result from further growth of the Nation’s population.”

Times have changed. Now, research warns about the social and economic risks of historically low birth rates in the U.S. and below-replacement birth rates in other industrialized countries. Two recent studies reflect those concerns. The first of these is the effort of Edward Crenshaw of Ohio State and Kristopher Robison of Northern Illinois University to reintroduce sociological theories as explanations of economic growth. Using pooled time-series analysis of changes in real gross domestic product per capita of more than 100 nations for the years 1970 and 2000, their study finds that population growth is an independent and necessary driver of economic and social development: “The long-run consequences of population growth for societal advancement have been positive rather than negative. Historical population density clearly exerts a robust, positive effect on contemporary economic growth rates.”

Debunking Mathusian fiction that fertility growth leads to “adversity, poor labor absorption, lagging capital formation, and poor macroeconomic performance,” Crenshaw and Robison’s results reveal quite the opposite. “As a form of societal investment, long-run population increase forces adaptive differentiation and interdependency on societies, complexities that lead to higher surpluses and social-spatial characteristics that predispose these societies to accelerated integration into the modern world.” Moreover, their study explains why fertility decline might be beneficial in the short-term but “disastrous” over time: “Rapid growth in the dependent population may retard economic growth, but it probably does not actually impoverish a society. . . . If a society can hold its own economically during its baby booms, then it stands a good chance of ratcheting up its economic activity when these children finally enter the labor force.”

Another study, by S. Philip Morgan and Heather Rackin of Duke University, highlights more the fact of population change than its correlation with economic or social development. They put on the table for all to see what was evident when the Nixon-Rockefeller commission issued its report: the worldwide transition, since 1960, from high fertility to fertility decline. But they come to a very different conclusion than the government report: “No twentieth century change has more profound implications or been more dramatic than fertility changes.”

Among the determinants of fertility decline the Duke researchers identify is the rising median age of childbearing, a behavioral shift common to all Western nations, including the United States. They concede that such postponement can be more dramatic in some countries, but nonetheless claim it can reduce the Total Fertility Rate of a country by 10 to 20 percent for up to two or three decades. It also raises the risks of difficulties in conceiving children and carrying them to term—and leads couples to revise downward (never upward) their intended fertility: “Thus the demographers’ adage: fertility delayed is (partly) fertility foregone.”

Given the findings of these two studies, is it any wonder that the United States has been in recession since 2008?